Hundreds of Victorian small businesses have been dudded from last cash grants

Victorian businesses that were wrongly paid COVID-19 grants will not receive the latest cash payments from the government.

EXCLUSIVE: Struggling businesses that were wrongly paid COVID-19 grants will not receive the latest cash payments from the government.

More than 300 businesses have been forced to pay back grants they were told they incorrectly received, but in a further blow many of these operators will now miss out on the state government’s latest $3000 grant.

More than 180 businesses will have the $3000 deducted from their overpayment that is still owing.

The remaining 105 businesses who have repaid the money owing will receive their $3000 cash grant.

The grants were rolled out after the recent five-day lockdown, but businesses owing money will again be dudded.

Instead the money will be deducted from the debts they are told they owe.

Parnassus Function Centre’s owner Tracy Reed previously received $30,000 in government grants but was last month told she must repay $25,000 with no explanation provided.

Parnassus Function Centre owner Tracy Reed and partner Rhys Morgan were given $30,000 in government grants and told to pay back $25,000. Picture: Jake Nowakowski

The Drouin East business owner is eligible for the government’s latest $3000 grant but won’t receive it.

Instead the amount will be deducted from the $25,000 she is still yet to repay.

“We are entitled to the $3000 grant and it’s not our fault that this error happened, none of us know why we have to pay the money back,” Ms Reed said.

“We can’t repay the $25,000 back because we didn’t have any business for 10 months and even when we did reopen we weren’t making any money.

“You’ve been told this money is a grant, but it’s like a loan and you have to pay it back.”

Ms Reed said it “causes anxiety and distrust with the government”.

The cash grants were meant to deliver a lifeline but instead have been a financial blow because of a government error.

Of 293 businesses overpaid 292 were eligible to receive the $3000 circuit breaker payment.

Tracy Reed says the move has made her distrust the government. Picture: Jake Nowakowski

More than 1100 business owners across Victoria have now lodged complaints about the government’s multi-billion Business Support Fund.

The Council of Small Business Organisations of Australia’s chief executive officer Peter Strong said the state government “is making it up as they go along”.

“This is Victoria’s version of Robodebt,” he said.

A spokeswoman from Jobs Minister Martin Pakula’s office said for those businesses incorrectly given grants but told to pay them back, they would not receive the last cash payments if they still had debts to be repaid.

“Overpaid Licensed Hospitality Venue Fund recipients who are eligible to receive the $3000 Circuit Breaker Action Payment will have that amount deducted from their overpayment,” the spokeswoman said.

Small Business Australia’s executive director Bill Lang said the government grants issues had reduced confidence in business owners needing financial help.

“Whatever government is doing it needs to be simpler and fairer, this is more complicated,” he said.

“It reduces the confidence of the business owner and increases their fear of making decisions.”

So far more than 2500 applications have been made for the Business Costs Assistance Program and 7600 Licensed Hospitality Venue Fund circuit breaker action plan payments have been approved.

The $143 Circuit Breaker Support Packages has been set up to help more than 50,000 Victorian businesses including restaurants, florists, confectioners, hairdressers, accommodation providers, musicians and performers who incurred losses due to the five-day lockdown.

@sophieelsworth